Care homes loan scheme will not protect owner’s property

I DO not understand how the latest government scheme of “lending” the cost of care home fees against the value of a property is going to protect the sale of the house.

Two years in a care home could easily cost £60,000-£70,000 which the family would have to repay or, more likely, do what the loan was trying to prevent, and sell the house.

The main reason why elderly people do not want to be forced to sell their home is so they have something to leave their children. Any savings will already have been spent on care and selling the family home is the last straw. A family who could afford to repay a “loan” would probably not need to borrow in the first place and those that could not would, inevitably, have to sell the property on the owner’s death.

All this ill thought idea will mean is that the house will have to be sold on the owner’s death rather than when they go into care, the outcome being little different from what happens at present.

From: Stewart Stretton-Hill, Associate, Thomas Eggar LLP, Newbury.

THIS latest White Paper is more a political elastoplast than solution to the crisis in social care that we are currently facing.

Firstly, the plan to enable pensioners to borrow money to pay for their care may result in many homes remaining empty while someone is in care home. This could lead vacated properties to fall into disrepair, although, we accept, in practice, this is unlikely. It is more probable the property would be sold anyway, rather than left empty, giving rise to the question as to whether those proceeds would have to be used to fund the care in any event.

If these proposals go ahead then local authorities will have to wait longer for loans to the elderly to be repaid. The shortfall in revenue will have to be funded from somewhere, so perhaps we should prepare for further budget cuts and increases in council tax to be announced shortly.

Equally, more detail is required to clarify exactly what will happen if the loan for residential care exceeds the value of the house and also what rate of interest will be levied. It would also be far easier for people to understand the scheme if they could be given an ideal of final cost, through capping the loans.

The White Paper also does not encourage people to get domiciliary care while still at home, to help alleviate the pressure on care homes in the UK. The system of free care in Scotland encourages domiciliary care and surely this is something our government should be focusing on, and indeed perhaps contributing more funds towards, as life expectancy levels continue to rise.